Incentive deals cut by Scott are small but numerous

TALLAHASSEE — Flanked by Mickey Mouse and corporate chieftains, Gov. Rick Scott touted his goal of "investing in our ports" last week when Walt Disney said it would ship tons of souvenirs through the Port of Jacksonville to its theme parks and resorts.

What went unmentioned was the $1 million Florida awarded last fall for TraPac to hire 10 employees at its 3-year-old, $300 million container terminal in Jacksonville. The North American arm of Japanese shipping giant Mitsui O.S.K. Lines had agreed to spend $2.5 million in exchange for those state dollars.

During his first 16 months in office, Scott has been cutting economic-development deals at a faster pace than his two predecessors, according to an Orlando Sentinel analysis of the contracts the Governor's Office has signed.

The deals reflect the former CEO-turned-governor's broader economic-development "stimulus" strategy: cheaper, smaller and sometimes higher-risk. And they show something else: Instead of bringing in new companies from out of state, a majority of Scott's economic-development deals are going to companies already here.

In the past year, Scott's office has awarded $1.5 million to Publix Super Markets for projects such as building a distribution center in Orlando; $10 million to Raymond James Financial Inc. to expand in Pasco County; and millions more to Florida-based companies such as Chico's in Fort Myers and Jacksonville-based Winn-Dixie Stores, according to data the Sentinel acquired on the state's incentive programs.

"If you're not taking care of what's in your own backyard, you have a fatal flaw in your recruitment strategy," said Scott's commerce secretary, Gray Swoope, who heads the public-private Enterprise Florida corporate-recruitment agency.

Many of the "corporate investors" in Enterprise Florida — the public-private partnership that executes incentive contracts with companies — have also been approved for incentives, including Darden Restaurants, Publix, Harris Corp., Kaplan and Embraer.

Scott took office vowing to call CEOs every day to coax them to move to Florida. But he also likes to brag about not being a spendthrift, from showing off cheap shirts to buying roof tiles in bulk for his Naples mansion ahead of hurricane season.

And with fewer dollars to spend, the average incentive package offered under his watch has been cheaper than those negotiated by his two immediate predecessors — and has led to Florida getting outbid by other states for at least seven major projects.

Scott said in an interview that he had signed deals with businesses faster than his predecessors, and "we're doing well" luring new companies from out of state.

He referenced MindTree, a global IT and product-engineering company paid $2 million in incentives to relocate to Alachua County, as an example of the companies he has reeled in that will bring jobs to Florida and nurture the state's talent.

"These are the kinds of companies we want in our state and who are looking for the right talent," he said. "I want to ask them, 'What can I do to make sure you want to move your business here?' "

Gov. Jeb Bush was the first chief executive to have all of Florida's current "tool box" of economic incentives, tax rebates and credits to work with during his entire eight years in office. He inked $796 million in deals with 645 companies, an average of $1.2 million each.

During his four years, Gov. Charlie Crist's economic-development arm did deals with 331 companies, totaling $611.9 million — or a bit more than $1.8 million per company.

With fewer dollars to award, Scott's office has had to spread them thinner. In 16 months, Scott's jobs agency negotiated deals with 203 companies, worth a total of $154.8 million, or an average of just less than $763,000 each. In exchange, those companies have pledged to create at least 22,000 jobs during the lifetime of their contracts.

Both Crist and Bush cut massive "innovation deals" with biotechnology companies. Bush's office, for instance, awarded $155.3 million to the Sanford-Burnham Medical Research Institute in Orlando. Crist's office handed out $94 million to Max Planck Society for its still-unopened research facility in Jupiter, and an additional $80 million to the University of Miami medical school for life-science research.

But even when those outliers are removed, Crist's average deal was still worth more than $1.1 million, and Bush's was worth a little more than $947,000 — far more than Scott's team is giving out.

Many of the deals under all three governors never panned out, particularly during Crist's administration when the economy was souring.

Florida Attorney General Pam Bondi is suing the founder of a now-defunct Washington software company called Redpine that took $750,000 from the state last year to relocate to Panama City, then abruptly closed its doors.

In October, the Orlando Sentinel reported that of 1,600 awards to companies since 1995, less than 40 percent had met their job-creation expectations — paid $739 million to create a little more than 86,000 jobs, compared with the $1.6 billion awarded for 224,500 projected jobs.

Most of the projects that failed to perform happened under Crist's tenure as the economy crashed and businesses put expansion plans on hold. A total of 13 companies have repaid some or all of the incentives they received.

And since last fall, Scott's Department of Economic Opportunity and Enterprise Florida have conducted an internal audit and begun developing a public Web portal for the public to review incentive deals, which is slated to be online by late July.

DEO earlier this year would not make available an updated data set of incentive deals. But the Sentinel has analyzed all the deals signed under the past three governors using data provided by DEO last year as well as updated figures the department inadvertently provided to Integrity Florida, a government-watchdog group that gave them to the First Amendment Foundation, of which the Sentinel is a member.

Some of the projects are considered confidential under Florida's public-records exemption. Upon being notified by the Sentinel on Friday that the data had been released, Scott's office and general counsel requested the newspaper not publish "sensitive" information that could compromise ongoing negotiations. The newspaper has opted not to publish wage information contained within the data.

"It could be devastating," the governor told the Sentinel on Friday evening.

Integrity Florida Executive Director Dan Krassner said the fact that many of Enterprise Florida's corporate benefactors were also receiving incentives showed why more public access to Florida's economic-development tax breaks is needed.

"The public deserves to know who received our money, how many jobs did they promise and how many jobs were created," Krassner said.

Critics of offering corporate incentives to large corporations already doing business in Florida say the state would be better-suited to steer those dollars into education or tuition assistance — areas of state spending reduced under Scott's watch.

"It's absurd to say a business isn't going to do something without an incentive. Everything is going to be driven by demand," said Rep. Scott Randolph, an Orlando Democrat campaigning to be the next state-party chairman.

But lawmakers have also cut spending on corporate incentives during the Great Recession and provided Scott with $111 million for the fiscal year that starts July 1 — far less than the $230 million he requested.

"If Apple wants to move their headquarters to Kissimmee, I think we'd want to help make that happen," said House economic-development budget Chairman Mike Horner, R-Kissimmee. "But we've made significant cuts across the board over the last four years. That was one of the many areas where we had to cut."

One consequence: The state has missed out on at least seven big-ticket projects under Scott's watch where rival states offered richer tax-incentive packages.

Among the biggest:

•Mitsubishi selected Savannah, Ga., over Tampa for a turbine-manufacturing plant after Georgia offered $30 million to the company, compared with Florida's $8 million.

•JetBlue Airways took a pass on Orlando after New York coughed up four times as much money to keep the company as the $7.1 million the Sunshine State put on the table.